I've been on a sort of binge of momentum and trend-themed podcasts recently ! Must admit, I'm still a little confused about the exact difference between the two. "Momentum" generally seems to be used as a technique to select individual stocks from a larger universe, typically based on their *relative* performance (go long the top ten risers over 6 months, that sort of thing). Whereas trend seems to be about getting in and out of different asset classes based on "self" performance (is the SPY above it's own 6 month moving average ?) Is that the right general idea ? A further complication seems to be whether you use the signals to go long/short or just long... I can see how the long/short approach might be more interesting from a theoretical/academic point of view but as a retail investor with limited scope for leverage, it seems less relevant
Everything you said is correct (i.e. relative momentum vs. trend following). You probably have better things to do but if you have time, check out these Excess Return episodes on momentum. Antonacci: th-cam.com/video/mTThmcbDuH4/w-d-xo.html Titman: th-cam.com/video/dfGuhlQ-CLQ/w-d-xo.html Vogel: th-cam.com/video/X9Yapfh9VlE/w-d-xo.html Jack & Justin: th-cam.com/video/OiuyqPMOxxs/w-d-xo.html
I've been on a sort of binge of momentum and trend-themed podcasts recently ! Must admit, I'm still a little confused about the exact difference between the two. "Momentum" generally seems to be used as a technique to select individual stocks from a larger universe, typically based on their *relative* performance (go long the top ten risers over 6 months, that sort of thing). Whereas trend seems to be about getting in and out of different asset classes based on "self" performance (is the SPY above it's own 6 month moving average ?) Is that the right general idea ? A further complication seems to be whether you use the signals to go long/short or just long... I can see how the long/short approach might be more interesting from a theoretical/academic point of view but as a retail investor with limited scope for leverage, it seems less relevant
Everything you said is correct (i.e. relative momentum vs. trend following).
You probably have better things to do but if you have time, check out these Excess Return episodes on momentum.
Antonacci: th-cam.com/video/mTThmcbDuH4/w-d-xo.html
Titman: th-cam.com/video/dfGuhlQ-CLQ/w-d-xo.html
Vogel: th-cam.com/video/X9Yapfh9VlE/w-d-xo.html
Jack & Justin: th-cam.com/video/OiuyqPMOxxs/w-d-xo.html
@@ExcessReturns A belated thank you, I always have time for more Excess Returns listening !!
Investigate AND use the Slow Stochastics indicator for entry/exit signals WITH the PSAR indicator ...